Strict construction of tax exemptions: express exclusion of PVC fabric defeats textile exemption, with declared commodity issue remanded.

PVC fabric and cotton coated leather cloth were held outside the textile exemption under the relevant U.P. trade tax notification because the notification expressly excluded PVC/HDPE fabrics. The plain language of an exemption notification was applied strictly, so the commodity could not be treated as exempt by interpretation once the exclusion was stated. A mistaken allowance of exemption in a later assessment year did not govern the years in dispute, as each assessment year is a separate unit. The alternative question whether the commodity was a declared commodity under the Central Sales Tax Act was left to the Tribunal for reconsideration.

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Issues: Whether PVC fabric or cotton coated leather cloth was exempt as textile under the relevant U.P. trade tax notification, and whether the alternative claim that it was a declared commodity under section 14 of the Central Sales Tax Act, 1956 required consideration.

Analysis: The notification specifically excluded PVC/HDPE fabrics from the category of textiles. Once such exclusion was expressed, the item could not be treated as textile for the purpose of exemption. Exemption notifications in fiscal law are to be construed strictly, and where the language is plain, the Court must give effect to it according to its ordinary and grammatical meaning. A subsequent assessment year's mistaken allowance of exemption could not control the years in question, because each assessment year is a separate unit. The earlier view treating leather cloth as textile related to an assessment period before the exclusion clause and was therefore not applicable to the present dispute.

Conclusion: PVC fabric was not exempt as textile under the notification, and the Tribunal's contrary allowance of exemption was unsustainable.

Final Conclusion: The revisions succeeded on the exemption issue, but the question whether the commodity was taxable as an unclassified item or as a declared commodity was left for reconsideration by the Tribunal.

Ratio Decidendi: Where a taxing exemption notification expressly excludes a commodity from the exempt class, the commodity cannot be treated as exempt by interpretation, and exemption notifications must be construed strictly according to their plain language.

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